Aureka Limited has won a seven-year prospecting production licence for the Comstock gold and silver mine, moving the Victorian project closer to development for the first time since mining ceased at the site in 1995.
Resources Victoria issued the licence in about four months, covering a 4.5-hectare portion of the previously disturbed Comstock site located about 2 kilometres north-northwest of St Arnaud. The permit includes the Walker Zone and the main Comstock Shear, which Aureka has identified as primary targets for mining under the licence.
Comstock already hosts a JORC-inferred mineral resource of 1.45 million tonnes at 1.21 g/t gold for 56,500 ounces of gold, plus 100,000 ounces of silver, figures the company has reported to the market.
Aureka last month completed an $8.9 million acquisition that added the operating Fiddlers Creek underground mine and the Wedderburn gold processing mill to its asset base. The purchase was funded with $2.5 million in cash and $6.4 million in Aureka shares and shifted the company from explorer to producer.
The company plans to use Wedderburn as a central processing hub, trucking ore from Fiddlers Creek and potentially Comstock to the mill, which has a permitted throughput of 42,000 tonnes per annum and is one of only six Victorian mills licensed for third-party tolling. Wedderburn sits about 45 kilometres from Comstock.
Aureka’s management says its immediate focus will be integrating the newly acquired operations, improving production at Fiddlers Creek and advancing pre-development work at Comstock so the site can be returned to production under the new licence.
Beyond the defined JORC resource, Aureka has outlined a conceptual exploration target for Comstock of 3 to 3.5 million tonnes, which it estimates could contain an additional 112,000 to 116,000 ounces of gold and 195,000 to 214,000 ounces of silver. The company’s stated global inventory across projects currently stands at 454,800 ounces of gold.
Recent drilling has returned high-grade hits that bolster that potential. At the Comstock Shear, a hole returned 4.4 metres at 8.9 g/t gold and 57.8 g/t silver from 102.8 metres, including a 0.3-metre interval grading 65.37 g/t gold from 116.2 metres; a duplicate sample from the same narrow interval assayed 95.6 g/t gold. At the Walkers Zone, Aureka reported 2.65 metres at 5.78 g/t gold from 20.5 metres, including 0.35 metres at 34.2 g/t gold.
Aureka’s longer-term growth remains linked to its larger Irvine project, which carries a 398,300-ounce resource. Recent scout drilling at Irvine hit gold 725 metres north of the existing 358,000-ounce Resolution lode boundary and has highlighted a two-kilometre gap between the Adventure and Resolution lodes for follow-up work.
The company has not yet taken a final decision to mine Comstock. Aureka must still lodge an approved work plan, provide a rehabilitation bond and obtain consent from the Crown Land Minister. It also continues to consult with the Dja Dja Wurrung Clans Aboriginal Corporation under a Land Use Activity Agreement as part of the approvals process.
